Hospira Falls 8% After FDA Action

By Sam Mamudi

A bad week for Hospira (HSP) just got a whole lot worse after the largest maker of generic injectable drugs said it is facing up to a new Food and Drug Administration import ban:

Hospira said it now is withdrawing its 2013 financial projections issued with its Wednesday earnings release, adding it could see sales drop by $50 million to $100 million, and adjusted earnings fall by 5 cents to 15 cents a share.

In an 8-K filing issued on Thursday, the company said the FDA had expanded the block on three intravenous pumps manufactured at Hospira’s Costa Rica facility.

The agency had issued an import ban on the company’s Symbiq intravenous pump in November. This directive now includes the Plum, GemStar and LifeCare PCA pumps, also made at the same facility.

The stock is down about 8% this afternoon; it fell 6.6% yesterday after its 2013 guidance fell short of estimates. Its quarterly earnings showed it had $44 million in Q4 charges related to dealing with FDA compliance at one of its facilities in Rocky Mount, N.C.

As Reuters reports:

Hospira had faced quality concerns regarding one its key plants in Rocky Mount, North Carolina, which it had to temporarily shut down. The plant resumed production in February last year.

In August, the FDA issued another warning to the company, citing quality problems at its Costa Rican plant that makes most of its infusion pumps. The warning was followed by recalls of some models, and eventually, last November, the federal agency blocked the import of Hospira’s Symbiq pump.

In the wake of the news, analysts at The Buckingham Research Group set a price target of $28, below today’s price of $29.85. They rate the stock at Neutral.

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